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United States Trade Representative Requests Comments on the Possible Reinstatement of Section 301 Ta United States Trade Representative Requests Comments on the Possible Reinstatement of Section 301 Ta

United States Trade Representative Requests Comments on the Possible Reinstatement of Section 301 Tariff Exclusions on U.S. Imports from China

In August 2017, the U.S. Trade Representative (USTR) launched an investigation under Section 301 to determine the impact of China’s practices and polices related to innovation, technology transfer, and intellectual property (IP) on U.S. commerce. Pursuant to the investigation, the USTR determined that China’s practices and policies were discriminatory or unreasonable and burdened U.S. commerce. The Trump Administration subsequently imposed tariffs of up to 25% on four lists of certain U.S. imports from China. The four lists of tariffs impacted approximately two-thirds of U.S. imports from China. 

To address concerns regarding the impact of the tariffs on U.S. businesses and consumers, the USTR developed a discretionary process by which interested parties could request an exclusion from the tariffs for a particular product. Numerous exclusions were granted, but they all had time limits, and extensions of the exclusions had to be requested (and granted) separately. Out of all the originally granted exclusions, the USTR approved extensions of those exclusions for 549 products. An index of 549 previously extended exclusions can be found here. This exclusion process went into effect in June 2018, and most of the exclusions and extensions expired by December 2020, although some COVID-19-related exclusions for items like personal protective equipment remain in effect. According to the USTR, all exclusion requests were evaluated on a case-by-case basis.

On October 8, 2021, the USTR announced a possible reinstatement of previously extended product exclusions. Specifically, the USTR will be accepting public comments on whether to reinstate particular exclusions that were previously extended, as well as the appropriate length of the reinstated exclusions. Comments will be accepted for 50 days starting October 12, 2021 and ending December 1, 2021. To submit a comment either opposing or supporting the reinstatement of a particular exclusion, commenters are first required to register on the USTR portal, which can be found here. Once registered, commenters may submit an exclusion reinstatement comment to the public docket. Interested parties seeking to comment on more than one exclusion must submit separate comments for each exclusion. Although this opportunity is limited to products for which an exclusion was originally granted AND for which the time period for that exclusion was extended, reinstatement of the exclusion can result in substantial duty savings for those that are eligible. 

The USTR will be evaluating the possible reinstatement of each exclusion on a case-by-case basis. That evaluation will focus on whether, despite the imposed tariffs beginning in September 2018, the particular product remains available only from China. As such, the USTR recommends that commenters address: (1) whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries; (2) any changes in the global supply chain since September 2018 with respect to the particular product or any other relevant industry developments; (3) the efforts, if any, the importers or U.S. purchasers have undertaken since September 2018 to source the product from the United States or third countries; and (4) domestic capacity for producing the product in the United States. A copy of the form containing the questions to be addressed can be found here.

Please reach out to Meghann Supino or Dale Stackhouse if you have any questions or would like assistance with preparing and submitting comments in favor of (or opposing) any of these tariff exclusion extensions.  

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.

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